• You receive a phone call that your Great Aunt Edna has passed and that she was childless and has left you her entire retirement portfolio. What do you do?
• You just left a meeting with your divorce attorney and with a check for the proceeds of your contentious divorce. What do you do?
• You receive a check in the mail after the sale of your family’s winery. What do you do?
Blog post series on instant wealth events
I will be writing a series of blog posts about various wealth events, how they come about, the intricacies of what to do with the money, mistakes to avoid, and things to think.
What does instant wealth mean? It is the unexpected amount of money or assets that you are not accustomed to or assets that represent more money than you have ever had in your life. The money is sudden or instant wealth. Let’s look at a list of how this happens.
1. Winning the lottery
2. Insurance settlement
3. Divorce settlement
4. Pension lump sum
6. Becoming famous overnight in entertainment or athlete
7. Stock options and employee benefits.
9. Proceeds from sale of property, business or equipment
10. Legal settlement
These are just a few ways you may receive instant wealth. Decisions, decisions! What should you do and what is the best way to make the most of the wealth? What must you do next? Do you need to pay taxes? What else do you need to do?
Opportunities for wealth!
We are all different and special and we all need to process the fact that we have this opportunity to open doors we have never had.
Opportunities to make your dreams come true. Opportunities to decide what it means for your life going forward. Learning how to process the emotions of this sudden wealth. I believe that you need to be thankful and reflect where the wealth came from and how hard you or someone was able to acquire this wealth. Now that you have this opportunity, take time to think and reflect. Be thankful to the power above, your God or someone that made this all possible.
Impact of sudden wealth events
The impact of this wealth is very strong and the emotions that runs through us when we have so many decisions to make can cause us to end up losing much of the wealth within a couple of years.
One way to work through instant wealth is to seek out professional help from a Certified Financial Planner (CFP®) that can assist you through the pitfalls that may be facing you and your family. A CFP® is able to go review the pros and cons of specific decisions that you may face and other solutions that you may have not thought possible. Preparation and planning is extremely important.
Find out how you feel about money and your emotions around receiving a large sum. Many people have ideas that they do not deserve money, that it’s not important, or that money is evil. Some may not have the ability to save some of this sudden wealth or put aside some of the money and as a result, they go through it like it would burn their hands to hold it. Find out how you feel or what you believe. If you don’t know or are unable to understand your money feelings, seek help by working with a therapist.
Now you are ready for action, let’s explore all the issues around sudden money, wealth events, and the pros and cons of each type of event.
Please check back as I add each blog post in this series.